Retail investors continued to pull money out of active U.S. equity funds in July, with outflows totaling $32.9 billion during the month, outpacing $21.7 billion in negative flows in June, according to Morningstar. Taxable bond, municipal bond and commodities were the only active categories with positive flows during the month; all passive categories had positive flows, with passive U.S. equity funds taking in the most at $33.8 billion. The top 10 fund families experienced outflows in their active offerings, except Vanguard and State Street, two firms known for their passive expertise. The Morningstar report points to six months of positive flows for bond funds, a sign of investors’ preference for low-risk assets and impressive returns. For example, year-to-date international bonds have returned 17 percent. “Decent returns and the promise of a steady stream of income at a risk level that still allows you to sleep at night add up to an investment proposition that is hard to beat,” Morningstar writes.
Endowments and Foundations Sour on Hedge Funds
Endowments and foundations are shying away from investing in hedge funds, says NEPC's Q2 2016 Endowment and Foundation Poll, which tracks institutional confidence in the economy, investing and market performance. Since the second quarter 2014, the number of respondents with zero exposure to hedge funds jumped from 2 percent to 24 percent, with respondents citing low or disappointing returns, high fees and lack of transparency as their top concerns with hedge fund investment. But the survey results weren't all bad for hedge fund managers: 55 percent of respondents are not discussing hedge fund divestment with their committees and almost a fifth of respondents have increased or are considering increasing hedge fund allocations. “While hedge funds play an important role in many institutional portfolios, the last several years have been difficult for the industry and investors are starting to look very closely at how hedge funds can work for them,” said Cathy Konicki, partner and head of NEPC’s Endowment & Foundation Practice Group. “These survey results are by no means indicating a mass exodus from hedge funds, but they do point to greater pressure being felt by the industry as a whole.”
Vanare, Redtail Create Account Opening Integration
A new integration lets advisors using wealth management technology from Vanare, like NestEgg and Spark, to sync client contact information directly from Redtail's CRM. In a statement, the companies said the new integration, which is available now, will streamline the data sharing process to ensure that all data input during the onboarding process flows directly to the advisor’s CRM, improving the entire account opening process. Vanare and Redtail plan to continue developing the integration and in the fall will offer two-way data sharing to sync client activity and status reports between Vanare’s technology and Redtail's CRM. Vanare founder and CEO Rich Cancro said the improvements to onboarding will help advisors scale their business, while Redtail CEO Brian McLaughlin added, “We’ve developed this integration to give advisors the superior level of organization workflow their clients and prospects expect and deserve.”
